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receive directives
and budget
allocations for specific
projects from the central government in accordance with the
state plan.
48.
In addition, a greater participation in banking activities from foreign banks will be permitted.
Specifically, joint venture banks incorporated in China will be allowed to conduct Renminbi business on a limited
scale starting from September 1993. However, these banks allowed to take Renminbi-denominated
will still not be
deposits from Chinese residents. Also, the total amounts of Renminbi deposits with and Renminbi assets held by these banks will be subject to certain ceilings (15).
(15)
According to the draft "Temporary Regulations on the Renminbi Business of Foreign Financial Institutions", Renminbi deposits with foreign banks will be limited to the following:
(i) deposits from foreign-funded enterprises;
(ii) Renminbi
funds
make
to
available non-foreign-funded enterprises under a foreign currency loan agreement package; and
(iii) deposits from individual non-residents.
Renminbi loans may be extended by foreign banks to foreign-funded enterprises and some specifically approved non-foreign-funded enterprises. Inter-bank lending between foreign banks and domestic banks will be subject to certain restrictions.
For foreign banks, the total amount of Renminbi deposits should not exceed 40% of the total foreign currency loans and 60% of the total Renminbi loans. Total Renminbi assets in China should not exceed 50% of the total foreign currency assets in China. Foreign banks should also comply with the interest rate, cash management and settlement rules set by PBOC, and submit 10% of their deposits to PBOC as a reserve requirement.
CONFIDENTIAL
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